What Is a Contingency Fee Agreement?
When you need to take legal action against someone, you might not always have the funding required to hire a lawyer. As you can imagine, paying a lawyer an hourly rate to prosecute your case through court can be incredibly expensive. Although many law firms prefer to work on an hourly basis, the experienced lawyers at Henry Law Firm will typically only take cases on a contingent fee agreement. A contingent or “contingency” fee agreement is the most common fee agreement for many civil cases, including personal injury, wrongful death, medical malpractice, wrongful termination from employment, and other instances in which the plaintiff seeks to recover damages.
Hiring an Ohio lawyer based on a contingent fee agreement is a powerful tool that allows you to get top-notch legal representation without the risk of paying substantial legal fees out-of-pocket. In fact, you are not responsible for paying your attorney in a contingency or fee agreement if your case is unsuccessful. This agreement has many benefits with few disadvantages. However, there is much confusion surrounding what constitutes a contingent fee agreement and if it is the right choice for you. Before entering into a contingent fee agreement, it’s crucial to learn if it will benefit your unique situation and understand how much you will be expected to pay.
Contingency Fee Agreements: 101
Commonly law firms will either offer clients an option to pay by the hour or offer a contingency fee agreement. A contingent fee agreement is a legal agreement that allows you to hire a lawyer for your case without having to pay any out-of-pocket upfront fees unlike a retainer fee. The lawyer getting payment is contingent on you winning your case. If you do not win your case, you don’t have to pay your contingency lawyer. With a contingent fee agreement in place, lawyers are entitled to an agreed-upon percentage of the damages won at the end of your case.
At Henry Law Firm, we offer our clients a contingency fee agreement to ensure each individual can pursue their legal claims without worrying about owing money out-of-pocket. Because our clients come to us after they have already suffered loss or injury, this agreement minimizes the risk they face in taking legal action.
Beyond making our attorneys’ fees contingent upon a successful outcome, we often will make our expenses contingent upon success too. This means the Henry Law Firm will pay the litigation costs, such as hiring experts, court reporters, private investigators, and all the other people and services we need to be successful in your case. When the expenses are contingent, in the event, we do not win – or if the responsible party is uncollectable – you do not have to reimburse us for our expenses.
The Benefits of a Contingency Fee Agreement
In our opinion, a contingent fee agreement is the fairest deal you can have with your attorney because your interests and your attorney’s interests are perfectly aligned: maximizing the amount of compensation your claim recovers. Hourly lawyers, of course, will want to achieve the best results possible for you, but they also have another interest – maximizing the time they can bill you for. The risk of being overbilled by your attorney is not present in a contingency fee agreement because you agree to the fee percentage upfront and also agree on any settlement amount for your case.
A contingent fee agreement also provides you with more security and less risk of pursuing your case. It’s important for you to remember:
- There are no upfront fees or expenditures if your case is lost. The most significant advantage of a contingent fee agreement is that there are no upfront costs for clients unlike a retainer fee. Additionally, clients don’t need to pay any fees if their case is lost at trial or fails to reach a settlement agreement, meaning you will not be burdened with costly legal bills while fighting to win compensation.
- Guaranteed lawyer commitment. Another benefit of entering into a contingent agreement is that you can be assured that your lawyer is doing the best they can to win your case. If the case isn’t won, they won’t receive any monetary payment from the damages you received. Essentially you can rest assured your lawsuit will be handled diligently and professionally, as nonpayment is a huge incentive to achieve success.
The Disadvantages of a Contingency Fee Agreement
Although there are many benefits to contingency fee agreements besides what we have mentioned above, there are a few disadvantages. Every law firm does not offer contingency fee agreements, nor are they suitable for every type of case. Below are a few details to keep in mind when considering a contingent fee agreement with an attorney:
- Complex cases could equal higher contingent fee agreements. The riskier your case and the more complicated it is, the higher the contingency fee percentage could be. Lawyers don’t have to accept cases that are deemed high risk, and if they do, they will likely charge you a higher percentage than if your case was of lower complexity.
- A contingent fee agreement could cost you more. In some instances agreeing to a contingent fee could have you paying significantly more than if you paid for a lawyer’s services hourly. For example, if your case is resolved quickly, you might pay a higher percentage for a contingency fee agreement than if you had paid an hourly fee. Regardless of if your case lasts a month or a year, you will likely be required to pay the same agreed-upon fee. But, as always, you must first agree to any settlement, and you will have an understanding of what your attorney’s price will be before making a decision.
The Use of a Contingency Fee Agreement
Contingent fee agreements are the primary attorney agreements for payment for personal injury cases. However, there are other case types that a lawyer can and could take if you don’t have the funds or a retainer fee for upfront and continual legal costs. Before an attorney proposes a contingent fee agreement, your case’s main requirement is that you are seeking monetary damages as opposed to representation in a criminal or divorce case. Your lawyer will probably want to have some security that is an accessible means to collect these damages, such as from a defendant’s insurance company.
Your lawyer will decide whether he or she will take on a case when the client requires it to be billed based on a contingent fee agreement. Below are a few different case types a lawyer could choose to take on a contingency fee basis:
- Workers compensation
- Debt collections
- Sexual harassment
- Professional malpractice
What Percentage Does a Lawyer Get In a Settlement Case?
Contingent fee percentages are generally not established by law – although some courts have standards for what percentages are acceptable. This means that a lawyer can determine the percentage they want to receive, and you can either agree or reject the proposal. Additionally, if a case involves a minor or a deceased individual, a probate court will need to review the proposed contingency fee and establish whether it is fair and reasonable.
A contingency fee can be as low as 25 percent or as high as 45 percent. However, on average, the estimated amount lawyers charge for contingency fees ranges between 33 ⅓ percent and 40 percent.
Contact a Contingency Fee Lawyer In Ohio About Your Case
An experienced and knowledgeable attorney, like those at Henry Law Firm, can help you with your case if you need a contingent fee agreement. Legal proceedings are often complex and financially straining, which is why we offer our clients this service. We stand behind providing our clients the best service possible to ensure they receive the deserved compensation. An experienced Ohio lawyer can handle your case professionally by critically examining the state laws and how they apply to your lawsuit. Should we not win your case at trial or garner a settlement, you won’t have to pay legal fees. Contact us at the firm today to discuss your case and establish a contingency fee percentage agreeable to both parties.